What To Know For Year Ends?
As the end of the year draws close all business owners’ start planning to make high profits by maximizing the amount for a tax deduction and reducing taxes payable. It is better to plan in advance for the year-end since you need to start a new year with a fresh start. There are certain tips you need to know if you are planning on ending this year with an organized plan on how to earn greater profits for the next year and to make the tax filing process simple for the start of the year.
Have a well organized system
You should not keep all your bookkeeping and calculating of accounts for the end of the year when it becomes a burden for you and your accountant. If you do not wish to employ a full-time accountant then hire an accountant from time to time to perform all these activities and keep all your receipts and correspondences up to date. When your system is organized then it eventually makes it easier for an accountant to be able to help and guide you in understanding complicated correspondences and cryptic messages.
Pay in installments
When you receive a notice from the revenue departments of Quebec or Canada you should make the payment immediately as it saves a huge amount of interest. In case you do not make the payment the interest you pay at the end of the year will be quite high. The rate of interest charged by the revenue department of Quebec is very high and in order to save your income from being paid off as interest keep track of your accounts and dates for payment of tax.
In case your business is earning profits regularly and cash is flowing freely throughout the year then you and your employees have worked hard. So let them reap the benefits of their hard work by giving year-end bonuses to all. This amount can then be deducted from the taxes payable, and you will be able to file it for the coming year.
Maintain a healthy balance
Take dividends only when you are sure that the income from other sources will allow the business to function smoothly. You need not pay tax for dividends as they are not deductible for taxes. Even then you should carefully withdraw dividends before the year ends. With the ever-changing rules you need to regularly check on the regulations to ensure that they have not changed for the amounts for which taxes can be charged.